That’s right. The recovery is a fake. It is COMPLETELY a result of massive increases in government borrowing.
The cheerleaders like to tell you that the economy has rebounded. We had government stimulus earlier, but now animal spirits have taken over and it is running on its own. Hah! The recovery is ONLY stimulus.
Let’s look at the numbers:
In 2007, the GDP was $14.0 trillion.
In 2010, the GDP was $14.6 trillion.
That’s a net increase of $600 billion — $600 billion in 3 years is not good, but it is a rebound that is at least slightly above inflation.
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However, let’s compare that to the increase in government borrowing.
In 2007, the U.S. government borrowed and spent $163 billion.
In 2010, the U.S. government borrowed and spent almost $1.4 TRILLION.
That’s a net increase of over $1.2 trillion.
The ENTIRE increase in our GDP can be attributed to the increase in government spending. In fact, the increase in government spending is almost TWO TIMES the increase in our GDP.
That means the economy is doing very poorly indeed. Without massive increases in government borrowing and spending, there would be no recovery at all.
As a final note of how much the U.S. government has increased its borrowing and spending, in February 2011 alone we borrowed and spent $222 billion. That’s almost 40 percent more than in ALL of 2007.
About the Author: Robert Wiedemer
Robert Wiedemer is a managing director of Absolute Investment Management, an investment-advisory firm for individuals with more than $80 million under management. He is a regular contributor to Financial Intelligence Report, the flagship investment newsletter of Newsmax Media. Click Here
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